ForFarmers' UK poultry mill deal with Boparan could harm competition, UK regulator says

ForFarmers NV

06/11/2024 09:21

Nov 6 (Reuters) - British food maker Boparan Holdings'
proposed deal to buy Dutch agricultural feed company ForFarmers'
 FFARM.AS  feed mill site in Burston could reduce competition in
poultry supply in the area, the UK competition watchdog said on
Wednesday.
    The Competition and Markets Authority's (CMA) initial probe
found the deal would give Boparan the ability and incentive to
harm rival poultry meat producers, leading to higher poultry
feed costs for chicken farmers and processors in East Anglia.
    
    WHY IT'S IMPORTANT?
    The CMA was probing a proposed joint venture between the two
companies in 2022 for competition concerns but dropped its
investigation after the parties abandoned that plan.
    Boparan -- which also owns 2 Sisters Food Group, a supplier
of ready-to-eat meals, frozen poultry to the likes of Aldi,
Asda, M&S and Tesco -- then went on to purchase ForFarmers's
feed mills in Burston and Radstock.
    The CMA said it did not find competition concerns related to
the acquisition of the mill site in Radstock.
    
    CONTEXT
    2Agriculture, the unit via which Boparan is buying the
mills, supplies poultry across Scotland, East Anglia and North
Wales.
    Netherlands-based ForFarmers and 2Agriculture operate two
mills each in East Anglia.
    
    KEY QUOTES
    "We're concerned that this deal could worsen competition
between poultry feed suppliers in East Anglia – leading to
higher costs for farmers which could then be passed down to
shoppers," said Joel Bamford, the CMA's executive director of
mergers.
    The CMA said the purchase of the Burston mill could lead to
less capacity for feed supply to independent farmers, higher
costs and reduced quality of services.
    
    WHAT NEXT?
    Boparan and ForFarmers have five working days to provide
remedies, in the absence of which the regulator will launch a
deeper phase 2 investigation.

 (Reporting by Prerna Bedi in Bengaluru; Editing by Savio
D'Souza)
 ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))